What is Finance and it's importance


What is Finance ?

Best Definition here will be, Finance means a resources that a household have. Finance is a study of knowledge related to wealth. Finance is important in managing household with limited resources.

Importance of Finance ?

When common man gets money, he has two options.
One, to make a productivity use. i.e. to invest it for better income. Second, to make unproductive use. i.e. to spend it on unnecessary things.
In simple term Productive use means simplicity. Productive use includes investing. In simple words, rowing seed is productive use of a fruit. But eating fruit with Seed is unproductive use.

Nature do not stop you from eating fruit, But if that seed is not returning to soil then you will not be able to eat fruit anymore. Same assumptions are true with Money.
So, Best way to increase money flow is by investing. For that best option is to reduce unwanted expenditure. Save money where you can and invest it at best desired place.

If You want to see a magic in your life, Take Care of Money and Money will Care for You. Let's understand this with a example, If you invest $1 at 20% dividend then you will have $237 after 30 years.
Now let's do this with some other numbers,
$10 - $2370
$100 - $23700
$1000 - $237000
$10000 - $2370000
$100000 - $23700000
You can save $10 - $100 by not having a luxurious dinner. More saving can be done by living a simple life. This principle is used by most of the Billionaire today including Warren Buffett, Mark Zuckerberg and Bill Gates.

Capital Building 

Capitalization is a major indicator of economic development. Capital building is converting savings to wealth.
As economic development is dependent on capitalisation, in same way Capital Building is dependent on savings.

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